Cabrera Proposes Public Option as the Answer to Proposed Insurance Rate Hikes

State Senator Jorge Cabrera of Hamden had a simple answer this week to all of the concerns surrounding the 2025 health insurance rate increases proposed by Connecticut insurers on nearly 200,000 people and businesses: just pass a “public option” law and let those people buy quality, less-expensive health insurance through the State of Connecticut.

Republicans in Connecticut have firmly opposed such a money-saving public option for years, but Cabrera – who is Senate Chair of the Insurance and Real Estate Committee – says after decades of Connecticut insurers raising health insurance rates on the public year after year, it’s time for an all-new approach.

“I understand insurance company arguments that they’re simply passing along higher pharmacy and hospital costs via premium rate increases onto their customers, but this annual rate review process has sounded like a broken record for several years now,” Cabrera said Tuesday during an Insurance Department public hearing on the rate requests. “Connecticut sets price targets, insurance companies come in way above these targets, the Insurance Department cuts the rate requests in half, but consumers still end up paying more every year. As has been stated, a third of state residents are struggling to pay their medical bills, and nearly half are forgoing medical care because of the high cost.”

“What we need to do is re-double our efforts to pass a public option here in Connecticut, where individuals and businesses can buy into the state’s health insurance plan,” Cabrera said. “We’ve raised several public option bills in recent years, and they’ve all received vehement opposition from Republicans. But the segment of Connecticut’s healthcare consumers who are in these small group and individual markets – about 200,000 people – need another high-quality, affordable health insurance option. And that option is the public option. This should be a priority for the General Assembly in 2025.”

Last week, the Insurance Department held a hearing on the initial proposed health insurance rate filings for the 2025 individual and small group markets. There are 8 filings made by 7 health insurers for plans that currently cover approximately 200,000 people (142,000 individual and 58,000 small group).

The proposed average individual rate request is an 8.3% increase, compared to 12.4% in 2024, and ranges from 7.4% to 12.5%. The proposed average small group rate request is an 11.9% increase, compared to 14.8% in 2024, and ranges from 5.1% to 13.6%.

In general, carriers have attributed the proposed increases to escalating costs trends for prescription drugs and the increased demand for medical services; experience adjustments; Medicaid unwinding; and higher than assumed COVID-19 costs.

Insurance companies received fierce lines of questioning from Connecticut officials, including Assistant Attorney General Thomas Ryan, who said insurance companies are claiming certain costs as seemingly untouchable medical cost increases when in fact those costs are negotiated between insurance companies and hospitals.

“Do you need the state to put a cap in place? Do you need the state to oversee those negotiations?” Ryan asked. “You guys are telling me that you’re not able to negotiate lower costs. … I’ve been here since 2009 and we’ve been talking about it every year, so what needs to change?”

The Insurance Department expects to make final rulings on the proposals in early September. Open enrollment for the 2025 coverage year begins Nov. 1, 2024.

Posted by Lawrence Cook